Multiparty government and economic policy-making

Abstract

Multiparty government has often been associated with poor economic policymaking, with distortions like lower growth rates and high budget deficits. One proposed reason for such distortions is that coalition governments face more severe 'common pool problems' since parties use their control over specific ministries to advance their specific spending priorities rather than practice budgetary discipline. We suggest that this view of multiparty government is incomplete and that we need to take into account that coalitions may have established certain control mechanisms to deal with such problems. One such mechanism is the drafting of a coalition agreement. Our results, when focusing on the spending behavior of cabinets formed in 17 Western European countries , support our claim that coalition agreements matter for the performance of multiparty cabinets in economic policy-making. More specifically, we find clear support for an original conditional hypothesis suggesting that coalition agreements significantly reduce the negative effect of government fragmentation on government spending in those institutional contexts where prime ministerial power is low.

Commitment Problems in Coalitions: A New Look at the Fiscal Policies Of Multiparty Governments

“…Second, coalition governments may implement various internal mechanisms to control individual ministers and overcome bargaining problems, and as suggested by Bäck, Müller and Nyblade (2013), this may have important consequences for policymaking in coalitions. We recognize the importance of such “coalition governance mechanisms,” but we see our hypothesis as a complementary explanation, and we argue that coalitions with a high degree of commitment potential can solve both common-pool problems and veto-player deadlock since high commitment potential should enable parties to commit to future policies without implementing specific coalition governance mechanisms.…”

Voters’ short-term responsiveness to coalition deals

“…Yet, there has been very little research investigating whether and how voters react to the deals parties are normally required to make right after the election in order to form coalition governments. 2 The lack of research investigating voter reactions to coalition formation is puzzling considering not only how important these agreements are in terms of (effective) policymaking (e.g., Bäck et al, 2017 ; Strøm et al, 2008 ) and voting behaviour during election times ( Matthieß, 2020 ), but also because of the media and political attention they attract in the aftermath of the elections. This paper takes up the task of filling in this research gap by investigating whether and how voters react to coalition government deals immediately after the elections.…”

Under the Influence: Pay-Offs to Legislative Support Parties under Minority Governments

“…In parallel, scholars have increasingly acknowledged the importance of the text of coalition agreements for the life of cabinets (e.g. Bäck et al 2017; Klüver and Bäck Forthcoming; Moury 2013; Müller et al 2008). In this study, we aim to analyse the content of explicit support agreements using similar tools and explain the variance among support parties’ demands.…”